Letters of opposition continue flowing into the Office of Management Budget as it reviews the Department of Labor’s rule to change the definition of fiduciary on retirement advice.
The Investment Company Institute on Monday told OMB’s Office of Information and Regulatory Affairs (OIRA) that DOL’s rule must include “significant new data” in its regulatory impact analysis to support DOL’s “massive overhaul of the retirement marketplace” and said there were three major factual holes in the DOL’s proposal.
ICI President and CEO Paul Schott Stevens also asked to meet with OIRA officials to share ICI research and data “in greater detail” as OIRA reviews the final regulation’s impact on American retirement savers and the retirement system as a whole.
ICI, a global trade group for regulated funds, does extensive research on investors and retirement plans in the investment company industry.
But Nancy Leamond, chief lobbyist for AARP, said in a Tuesday blog posting — Tuesday marked the one-year anniversary of President Obama’s public endorsement of DOL’s fiduciary rule — that “after nearly a year of deliberations and thoughtful responses to comments, AARP is hopeful that the proposed rule will be finalized soon.”
Schott Stevens, however, pointed to three areas in DOL’s rule proposal that aren’t true. First, he said, DOL’s claims that broker-sold funds “underperform” are not supported by the very academic studies on which it relies, he said.
Second, DOL “relies on several academic studies to support its claims that investors are harmed by their use of brokers,” Schott Stevens wrote, but “none of these academic studies actually compares the key element that would be necessary for these studies to provide support” for the regulatory impact analysis.
Notably, he continued, the analyses “do not compare outcomes of investing with a financial advisor that is a fiduciary to the outcomes of investing with a broker or other financial advisor that is not a fiduciary. These studies also rely on outdated data that fail to reflect fundamental changes in the market for broker-sold funds in the past 10 years.”